Why Is Consuming a Quantity Above Equilibrium Wasteful

question 73

Multiple Choice

Why is consuming a quantity above equilibrium wasteful?

• A) because there are willing buyers of the good who do not purchase it
• B) because resources are used without making society better off
• C) because it creates a shortage, which generates waste
• D) because it creates a surplus, which generates waste

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Definitions:

Carrying Amount

The net value of an asset or liability reported on the balance sheet, calculated as the original cost minus depreciation, amortization, or impairment costs.

Federal Unemployment Taxes

Taxes imposed by the federal government on employers to fund state workforce agencies and unemployment compensation for workers who have lost their jobs.

Federal Income Taxes

Taxes imposed by the government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Payroll Tax Expense

Taxes that are withheld or levied on an employer's payroll, including both employer and employee contributions, such as social security and Medicare taxes.